Bankoh bullish, though posting lower profit

Bank of Hawaii reports lower deposits and
lower profits for the first quarter, but says private sector business is up and
the bank is bullish on the Hawaii economy.

Bankoh made an $36 million first quarter
profit, down $8 million from $44 million a year ago. Revenue fell 6.6 percent
to $136.3 million. The bank's quarterly earnings report made a distinction
between government deposits, which were down, and private sector deposits,
which were up.

The report said, "Hawaii's economy
continued to improve during the first quarter of 2013 led by tourism," and
cited improving home sales as well.

Net interest income fell 10 percent to $89
million while non-interest income fell fractionally to $48 million, mostly on
reduced mortgage banking revenue, the bank reported Monday. Return on average
assets was 1.08 percent, down from 1.29 percent a year ago. Efficiency ratio
was 61.90 percent, compared to 58.35 percent a year earlier.

Bankoh's loan and lease portfolio at the end
of the quarter was under $5.8 million down $70 million from year-ago levels.
Deposits fell to $11.2 billion on lower public deposits - consumer and business
deposits rose. Asset quality improved and the bank was able to reduce its
provision for loan losses by $2 million from the fourth quarter of 2012 to just
under $127 million at the end of March. Net loans and leased charged off
totaled $2 million. Total assets on March 31 topped $13.5 billion, but that was
down $230 million from year-ago levels.

Expenses included $1.5 million for phasing
out operations in American Samoa and $1.2 million for the final phase of new
computers companywide.